Plotnikov V.S.Russian Presidential Academy of National Economy and Public Administration, Balakovo Branch Balakovo, Russian Federation vcplotnikov@yandex.ru
Plotnikova O.V.Russian Presidential Academy of National Economy and Public Administration, Balakovo Branch Balakovo, Russian Federation vcplotnikov@yandex.ru
Importance The concept of consolidated financial reporting still implies such complicated aspects as a methodological and practical framework of goodwill accounting as an intangible asset and related goodwill impairment and recovery of impairment losses. Objectives The main objective of the research is to prove that value of other assets may be subject to testing for impairment as an item of subsidiary's investment, which the investor controls as a result of business combination, rather than goodwill as an intangible asset. As part of the approach, we prove that it is possible to recover losses from impairment of non-current assets of subsidiary's investee with earned capital (capital, investment capital earned), i.e. depreciation of non-current assets. In this respect, we set up the following goals: to prove that goodwill measurement results from a comparison of the value of non-current financial assets (investment) and net identifiable assets of the investee; to determine the extent impairment of investee's non-current assets influences the current value of goodwill, and possibilities to recover them in consolidated financial statements; to propose an accounting and methodological framework for impairment and recovery of goodwill impairment losses. Methods The methodology for accounting goodwill impairment and recovery of impairment losses relies upon the capital maintenance concept that requires keeping the amount of financial capital (net identifiable assets) of the investee (subsidiary) as part of consolidated financial statements as of the beginning and end of a reporting period. The methodological framework of the research comprises work and proceedings of the leading national and foreign scientists on consolidated financial reporting. Studying the consolidated reporting methods, we adhere to International Financial Reporting Standards (IFRS) and federal laws of the Russian Federation relating to accounting and consolidated financial reporting. Results We prove that the concept of goodwill impairment shall mean the result of impairment of the investee's non-current assets and recovery of those losses with earned capital, investment capital earned. Conclusions and Relevance As a result of the research, we conclude that goodwill reflects the extent to which the investee's net identifiable assets are impaired due to their wear and tear, with their depreciation indicating a possibility to recover goodwill impairment losses.
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Novye MSFO po konsolidatsii i otsenke spravedlivoi stoimosti [International GAAP 2012: Generally Accepted Accounting Practice under International Financial Reporting Standards]. Moscow, Al'pina Pablisher Publ., 2013.
Plotnikov V.S. Konsolidirovannyi uchet i otchetnost': Metodologicheskii i metodicheskii aspekty [Consolidated accounting and reporting: Methodological and methodical aspects]. Saratov, Saratov Socio-Economic Institute Publ., 2001, 256 p.
Plotnikov V.S., Plotnikova V.V. Osnovy finansovogo i upravlencheskogo ucheta [Fundamentals of financial and management accounting]. Saratov, Socio-Economic Institute Publ., 2005, 432 p.
Plotnikov V.S., Shestakova V.V. Finansovyi i upravlencheskii uchet v kholdingakh [Financial and management accounting in holdings]. Moscow, FBK-PRESS Publ., 2004, 336 p.
Plotnikov V.S., Yusupova I.V. Evolyutsiya kontseptsii konsolidirovannoi finansovoi otchetnosti [The evolution of the consolidated financial reporting concept]. Mezhdunarodnyi bukhgalterskii uchet = International Accounting, 2013, no. 23, pp. 2–7.
Plotnikov V.S., Plotnikova O.V. Biznes-uchet i integrirovannaya otchetnost' [Business accounting and integrated reporting]. Mezhdunarodnyi bukhgalterskii uchet= International Accounting, 2014, no. 13, pp. 25–34.
Plotnikov V.S., Pakhomov A.S. Sovremennyi vzglyad na otsenochnyi kapital v sootvetstvii s Kontseptsiei podderzhaniya kapitala [A contemporary view on the estimated capital in accordance with the capital maintenance concept]. Mezhdunarodnyi bukhgalterskii uchet = International Accounting, 2014, no. 41, pp. 29–40.
